Description
Global growth is projected to continue in 2024 and 2025, with real global GDP projected to increase 3.1 percent in 2024, matching its 2023 pace, and post a gain of 3.2 percent in 2025.
The steadiness of global GDP growth masks substantial differences across countries. Most G7 economies are experiencing soft landings, but to different degrees. The United States has benefitted from favorable demand and supply drivers. The euro area has experienced less economic momentum, but growth should pick up once monetary policy begins to ease.
Major emerging economies’ outlooks are shaped by divergent factors. China’s economy rebounded last year because of robust consumer spending and private investment (outside of real estate), but the strength of Chinese consumption is likely to fade in 2024. Meanwhile, India is projected to continue to grow robustly, boosted by domestic reform and a pickup in foreign investment due to “friendshoring.” Pre-war surpluses and demand for its energy exports have put a floor under Russian growth.
Soft landings are the most likely outcome for the United States and most other major economies, but recession risk is still elevated because of geopolitical uncertainties and the potential for more inflationary supply shocks and asset price corrections.
This PIIE Chart is adapted from Karen Dynan’s blog post “PIIE projects continued global economic growth in 2024 amid lingering inflation concerns” and her presentation at the Global Economic Prospects: Spring 2024 event.
